An empirical application to the Netherlands: 1952–1986

Abstract

In this chapter empirical results for the model developed in Chapter 5 will be presented for the Netherlands, using annual data for the period 1952–1986. This period is interesting, both from an economic and a political point of view. The period witnessed a strong and sustained economic growth until the seventies when stagflation hit the economy. The Dutch social security and insurance system or ‘welfare state’ was set up in the latter half of the sixties and the first half of the seventies mainly. This set-up took place rather smoothly due to the prosperous state of the economy which kept demand for transfers low. This situation drastically changed from the mid-seventies onwards. As regards the political sphere, the so-called ‘politics of accommodation’, practiced by the Dutch political parties, which involved, inter alia, a taking account of the wishes of the opposition by the governing coalition, changed into a ‘politics of confrontation’ and less stability during the second half of the sixties (cf. Lijphart(1986)).